The euro slid for the sixth time in eight days against the dollar before data that may add to signs that Europe’s debt crisis is damping economic growth.
The 17-nation euro dropped versus the yen ahead of reports forecast to show that manufacturing in Germany and France, Europe’s two biggest economies, weakened this month. The pound was 0.2 percent from a month low against the dollar before the Bank of England releases its November meeting minutes. The U.S. currency advanced most of its major peers as Asian stocks dropped, while Australia’s dollar slid after a preliminary reading of a Chinese industrial output gauge declined.
“The bias for the euro is that it falls,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. “Overall, the euro-zone economy is looking weak and trending weaker, and we’re expecting they’re going to recession sometime maybe next year.”
Europe’s shared currency lost 0.3 percent to $1.3459 at 8:48 a.m. London time. The euro fell 0.3 percent to 103.67 yen. The dollar was little changed at 77.02 yen.
The euro may fall toward $1.3150, Speizer said.
The Stoxx Europe 600 Index of shares was 0.1 percent lower and the MSCI Asia Pacific Excluding Japan Index (MXAPJ) fell 2.3 percent. Japanese markets are shut today for a holiday, while markets in the U.S. will be closed tomorrow for the Thanksgiving public holiday.
A preliminary reading of a euro-area composite index based on a survey of purchasing managers in manufacturing and services industries fell to 46.1 in November from 46.5 last month, according to the median estimate of economists surveyed by Bloomberg News. That would be the least since June 2009.
European Manufacturing
A manufacturing index in Germany fell to 48.5 this month, the least since July 2009, while a similar gauge in France dropped to 48 from 48.5 in October, according to two separate surveys. The advance figures for all three measures will be released today and readings below 50 indicate contraction.
Demand for the pound was limited by prospects the Bank of England will signal additional easing in meeting minutes scheduled for release today.
The minutes “will provide important indications about the likelihood of additional asset purchases by the BOE in coming months,” Valentin Marinov, a foreign-exchange strategist at Citigroup Inc. in London, wrote in a note to clients. “A partial confirmation that more asset purchases will come soon could be less supportive for sterling.”
BOE Easing
The Bank of England held the ceiling for asset purchases at 275 billion pounds ($429.5 billion) at its Nov. 10 meeting. The bank, which expanded so-called quantitative easing by 75 billion pounds last month, said the current purchases will take another three months to complete and the “scale of the program will be kept under review.”
The pound was 0.4 percent lower at $1.5570 after falling to $1.5582 yesterday, the weakest level since Oct. 12.
The pound has lost 3.6 percent over the past 12 months, the third-worst performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.
The Australian dollar extended declines against the greenback after the HSBC Flash Manufacturing PMI for China, Australia’s biggest trading partner, fell to 48 this month, predicting the biggest contraction since March 2009. That compares with a final reading of 51 in October.
‘Massive Uncertainty’
“We’ve still got massive uncertainty about what’s happening in Europe and growing concerns about the nature of the growth profile for China,” said Tim Riddell, head of global markets research at Australia & New Zealand Banking Group Ltd. in Singapore. “In that backdrop, the likes of Aussie and kiwi will remain under pressure as markets reassess global demand” for commodities.
The Dollar Index touched a one-month high ahead of U.S. data due today that may add to signs the world’s biggest economy is weathering the global slowdown.
The Thomson Reuters/University of Michigan final index of consumer sentiment climbed to 64.5 in November, the highest since June, while personal spending increased for a fourth month in October, Bloomberg surveys of economists indicated.
“The solid profile of the U.S. economy is helping it be last resort currency at the moment,” ANZ’s Riddell said of the dollar.
The Dollar Index (DXY), which IntercontinentalExchange Inc. uses to track the currencies of six major U.S. trading partners, gained as much as 0.4 percent to 78.582, the most since Oct. 10.
India’s rupee rebounded from a record low amid speculation the central bank sold dollars to curb the worst slide in the currency in three years.
The rupee advanced 0.4 percent to 52.13 per dollar after touching an all-time low of 52.73 yesterday.
To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Masaki Kondo in Singapore at mkondo3@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
